Retail is undergoing significant transformation due to technological advances and changing consumer preferences. Among the most groundbreaking innovations is the emergence of unmanned stores.
These unmanned stores use technologies such as artificial intelligence (AI), computer vision, Internet of Things (IoT) and mobile payment systems to provide a seamless shopping experience.
In a world increasingly shaped by the COVID-19 pandemic and the rise of e-commerce, unmanned stores offer a glimpse into the future of retail, emphasizing convenience, efficiency and cost savings.
According to BIS Research, the unmanned stores market will reach $962.6 billion by 2033, with a CAGR of 31.59% during the period 2024-2033.
The concept of unmanned stores
Unmanned stores, also known as cashier or automated stores, are retail units that operate without traditional human staff such as cashiers, warehouse clerks, and customer service representatives.
These stores use a combination of sensors, cameras, and artificial intelligence algorithms to monitor inventory, track customer movements, and facilitate transactions. The concept is designed to provide a frictionless shopping experience where customers can walk in, pick up the items they need and leave without having to wait in line or interact with a cashier.
Technology behind unmanned stores
- Artificial Intelligence (AI): Artificial intelligence plays a key role in analyzing data from cameras and sensors to track customer behavior and inventory levels. Machine learning algorithms help recognize products, understand purchasing patterns, and optimize store operations.
- Computer vision: This technology allows store cameras to identify products and track customer movements. By analyzing visual data, computer vision systems can determine which items are picked up or returned by customers, ensuring accurate billing.
- Internet of Things (IoT): IoT devices such as smart shelves and RFID tags provide real-time data on inventory levels. These devices communicate with the store’s central system to alert you when inventory is low, allowing for timely inventory replenishment.
- Mobile payment systems: Mobile payment apps and digital wallets facilitate seamless transactions. Customers can scan their items and pay with their smartphones, eliminating the need for cash or credit card transactions at checkouts.
- Cloud Computing: Cloud platforms store and process vast amounts of data generated by unmanned stores. These platforms provide the computing power needed for real-time analytics and AI-driven insights.
Advantages of unmanned stores
- Comfort: Unmanned stores offer a hassle-free shopping experience. Customers can enter the store, select their items, and leave without waiting in line or interacting with cashiers. This is especially beneficial in busy urban areas where time is a precious commodity.
- Reduced operating costs: By eliminating the need for on-site staff, unmanned stores can significantly reduce labor costs. This allows retailers to allocate resources more efficiently and potentially lower prices for consumers.
- 24/7 availability: Many unmanned stores operate around the clock, giving customers the flexibility to shop at any time. This is especially beneficial in places where there is a high demand for late night or early morning shopping.
- Improved inventory management: IoT devices and AI-driven analytics enable real-time tracking of inventory levels. Retailers can optimize inventory levels, reduce waste and ensure popular products are always available.
- Data-driven insight: Data collected from unmanned stores provides valuable insights into customer behavior and preferences. Retailers can use this information to tailor their product offerings, marketing strategies and store layouts to better meet customer needs.
Challenges and considerations
- Security and theft prevention: Ensuring the safety of unmanned stores is key. Advanced surveillance systems and artificial intelligence algorithms are needed to detect and prevent theft. Additionally, stores must take measures to deal with potential vandalism.
- Technical reliability: The smooth operation of unmanned stores depends on the reliability of their technological infrastructure. Any system error or failure can disrupt the shopping experience and lead to customer dissatisfaction.
- Privacy concerns: The widespread use of cameras and sensors raises privacy concerns among consumers. Retailers must be transparent about their data collection practices and ensure that customer data is handled securely and in accordance with data protection regulations.
- Initial setup costs: The implementation of unmanned store technology requires significant upfront investment. Retailers must weigh these costs against the long-term benefits and savings to determine the viability of such a venture.
Case studies and examples
- Amazon Go: Amazon’s checkout-free store concept, Amazon Go, was one of the first to gain widespread attention. Customers use the Amazon Go app to enter the store, pick up products, and leave. The store’s “Just Walk Out” technology automatically detects which items have been taken and charges the customer’s Amazon account.
- Alibaba Hema stores: In China, Alibaba introduced Hema stores, which combine online and offline shopping experiences. Customers can scan product barcodes to get information, make purchases through the Hema app, and have their groceries delivered in as little as 30 minutes.
- 7-Eleven: The convenience store chain 7-Eleven has experimented with unmanned stores in various locations. These stores offer a variety of products and use mobile apps to enter and pay, providing a quick and easy shopping experience.
Future prospects for unmanned stores
As technology continues to advance, the future of unmanned stores looks promising. As artificial intelligence and IoT technologies become more sophisticated and cost-effective, we can expect an increase in the number and variety of unmanned stores. Innovations such as enhanced biometric authentication and enhanced AI-driven analytics will further increase the efficiency and security of these stores.
In addition, the COVID-19 pandemic has accelerated the spread of contactless technologies, making unmanned stores more important than ever. The demand for convenience is likely to drive the expansion of unmanned stores in various retail sectors.
About the publisher: BIS Research is a global market intelligence, research and advisory firm focused on emerging technology trends that are likely to disrupt the market. His team consists of industry veterans, experts and analysts with diverse backgrounds in consulting, investment banking, government and academia.